The accountant of Latifa Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2025.

There were 20,000 shares of common stock outstanding during the year.

Instructions

a. Prepare a multiple-step income statement.

b. Prepare a single-step income statement.

c. Which format do you prefer? Discuss.

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Rent revenue Interest expense Market appreciation on land above cost Salaries and wages expense (selling) Supplies (selling) Income tax Salaries and wages expense (administrative) Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets (70% selling, 30% administrative) Cash dividends declared $ 29,000 18,000 31,000 114,800 17,600 23,100 135,900 51,700 496,000 980,000 65,000 16,000